Business Law Chapter 19 Notes - For the class of 4/15 4/22...

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For the class of 4/15 & 4/22 Chapter 19 A. Conditions Relating to Performance -the ordinary method of discharging obligations under a contract is by performance -come into effect only upon the occurrence Of a specified event, or an existing obligation may be extinguished when an event happens -these are conditional promises 1. Classifications of Conditions -when the occurrence or nonoccurrence of an event, as expressed in a contract, affects the duty of a party to the contract to perform, the event is called a condition -terms such as if, provided that, when, after, as soon as, subject to, and On the condition that indicate the creation of a condition i. Condition Precedent -condition precedent: a condition that must occur before a party to a contract has an obligation to perform under the contract ii. Condition Subsequent -on the happening of a condition subsequent, such an event extinguishes the duty to thereafter perform iii. Concurrent Condition -in most bilateral contracts, the performances of the parties are concurrent conditions -their mutual duties of performance under the contract are to take place simultaneously B. Discharge by Performance 2. Normal Discharge Contracts -a contract is usually discharged by the performance of the terms of the agreement -also discharged by the expiration of the time period specified in the contract 3. Nature of Performance -performance may be the doing Of an act Or the making of payment i. Tender -an offer to perform is known as tender -a tender Of payment is not just an expression Of willingness to pay; it must be an actual offer to perform by making payment of the amount owed ii. Payment a. Application of Payments -if the debtor specifies the debt to which the payment is to be applied and the creditor accepts the money, the creditor is bound to apply the money as specified b. Payment by Check -payment by commercial paper, such as a check, is ordinarily a conditional payment -merely suspends the debt
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4. Time Of Performance i. No Time Specified -when the time for performance is not specified in the contract, an obligation to perform within reasonable time is implied -what constitutes reasonable time is determined by the nature of the subject matter and the circumstances ii. When Time is Essential -if performance of the contract on or within the exact time specified is vital, it is
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